Prime Minister Manmohan Singh today said India remained committed to working for good relations and peaceful existence with its neighbours but it was also firm in its resolve to deal effectively with any threat to the country.

"Incidents like the one that took place on the LoC last month are against the norms of civilized international behavior and are simply unacceptable to us," he said in his address at the Conference of Governors at Rashtrapati Bhavan here.

Dr Singh was referring to the incidents of early January in which Pakistani troops are said to have crossed the Line of Control (LoC) and killed two Indian soldiers and mutilated their bodies. Pakistan said three of its soldiers were killed in firing by Indian forces.

"We have also to recognize that our neighbourhood is characterized by growing instability and uncertainty," he said.

He said that, to meet the entire spectrum of security challenges, the capabilities of both the Armed Forces and the police forces were being constantly strengthened through provision of cutting edge technology and modern platforms. "We are also undertaking infrastructure development programmes in the border areas to enhance mobility as well as connectivity," he said.

Dr Singh said that the Government had adopted a two-pronged strategy for dealing with the menace of Left-wing extremism. It had intensified operations against the extremists but had also endeavoured to bridge the development and governance deficit in the Left-wing extremism affected areas, many of which had predominantly tribal populations.

He said the Integrated Action Plan for 82 select and backward districts, most of which are affected by Left Wing Extremism, is beginning to show encouraging results.

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"Due to all these efforts, the geographical spread of the menace of Left Wing Extremism has shown a shrinking trend. Further, the number of incidents of Left Wing Extremist violence in 2012 showed perceptible decline compared with the previous year. However, much more remains to be done and we will make all efforts to accomplish what we still have to do. As has been pointed out by Governor of Assam, the expansion of Maoist activities to upper and lower Assam is worrisome," he said.

Turning to the horrific December 16, 2012 incident of gang-rape in Delhi, to which President Pranab Mukherjee had also referred in his inaugural address at the conference yesterday, Dr Sngh said the crime had shaken the collective conscience of the country. He said the Government had been prompt in acting on the recommendations of the Justice Verma Committee by promulgating an ordinance to strengthen the law to deal with crimes of sexual assault of an extreme nature against women.

He pointed out that there was a need to sensitize the police forces towards showing special care in dealing with crimes against the weaker sections of society, including women, Scheduled Castes and Scheduled Tribes, minorities and children.

"There is also a need to induct more women in our police forces. I urge the Governors to guide their State Governments in this direction," he said.

Dr Singh said economic growth in this fiscal year would be much below the average growth of about 8 per cent that the country had achieved in the last decade.

"The factors that have caused this slowdown lie both outside and within our country...It is imperative that we do everything possible to reverse this trend and the Government has made concerted and serious efforts in recent months to revive investment and growth," he said.

He listed the steps being taken by the Government to put the economy back on the high growth path, including to streamline the process of clearance of investment proposals. He stressed that the climate for investment was also affected by the activities of the State governments.

"Factors like the state of law and order, and how easy or difficult it is to acquire land and obtain electricity connections also have an important influence on the climate for investment," he said.

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He said policy measures announced in the current year have generated optimism which is reflected in an upturn in the Business Expectations Index for the October-December quarter, the Purchasing Managers' Index in October- December and buoyancy in capital markets.

"Internal accruals of the corporate sector, necessary for a pick-up in investment, have also started improving. There has also been a moderation in core inflation. These factors point towards recovery in GDP growth in the second half of the current year," he said.

Dr Singh said the Government intended to contain the fiscal deficit for the current year at 5.3% of GDP and reduce it to 4.8% in the next year. The fiscal deficit is targeted to be reduced by 0.6 percentage points each year thereafter, he said.

He also detailed the steps being taken to bridge the infrastructure deficit in areas such as railways, roads, airports, ports irrigation, and water-supply, which have come under additional stress because of the rapid economic growth in the last decade.

The Prime Minister dwelt at length on the internal security situation and said 2012 saw clear signs of improvement of conditions in Jammu & Kashmir, the North-East and Left-wing extremism affected areas though there was a lot which still needed to be done.

He said the Government had taken several steps for the improvement of mechanisms and instrumentalities to counter terrorism. These include strengthening of the Multi Agency Centre (MAC) and the Subsidiary Multi Agency Centre (SMAC), creation of four new hubs of the National Security Guard (NSG), construction of coastal police stations and provision of high technology boats, setting up of the National Investigation Agency, and creation of NATGRID. The passage of the Unlawful Activities Prevention Act (Amendment) Bill in Parliament has given more teeth to the extant anti-terror regime and is at par with international standards, he said.

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"In a secular polity that India is, the need for maintaining communal harmony can hardly be overemphasized. Both the Centre and States have to pursue a well coordinated strategy to achieve this objective," he said.

Dr Singh said the Government was alive to the need to curb corruption in public life and improve the processes of governance. "We remain committed to the enactment of the Lokpal and Lokayuktas legislation. We hope Parliament will pass this Bill shortly. The Public Interest Disclosure and Protection of Persons Making the Disclosure Bill, The Prevention of Bribery of Foreign Officials and Officials of Public International Organizations Bill, Citizens Right to Grievance Redressal Bill are all under consideration of the Parliament," he said.

He said the Government is considering amendments to the Prevention of Corruption Act not only to enable faster punishment of the guilty public servants but to also provide more effective protection to those who are honest.

He said the Direct Benefits Transfer Scheme is an important step that the Government has taken to improve targeting, reduce corruption, eliminate waste and enhance efficiency in the public delivery system.

"We plan to incrementally roll out the scheme from identified districts to the whole country to deliver benefits of identified schemes to the beneficiaries. The Aadhar Numbers being issued by the Unique Identification Authority of India (UIDAI) constitute an integral element of the Direct Benefits Transfer strategy. This Scheme is also expected to bring about unprecedented financial inclusion of our rural masses," he said.